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The  Soul  in  the  Dollar 


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^ddhess 

of 


JOHN  SKELTON  WJLLIAM5 

Comptroller  of  ttie  Currency 


'Before  the  National  3ank  Section  of  the 

PiMZmCAN  3 ANKEKS  ASSOCIATION 

At  the  Annual  Contention  at  Kansas  City 


SETTZM3ZK  26th.  1916 


^6r 
1/1/5A 

The  Soul  in  the  Dollar 


Mr.  President,  Members  of  the  Association,  Ladies 
and  Gentlemen: 

THIS  is  a  political  year,  but  so  far  as  possible, 
politics  will  be  kept  out  of  this  address  which 
you  have  done  me  the  honor  to  ask  me  to  make 
before  you.  Unfortunately,  it  will  be  necessary 
for  me  to  use  now  and  then  that  most  dangerous 
of  all  of  the  letters  of  the  alphabet,  for  the  speaker, 
the  capital  I.  It  is  a  matter  of  common  observa- 
tion that  in  colloquial  or  oratorical  talk  in  which 
the  dear  I's  are  most  frequent,  the  ideas  are 
scarcest.  I  don't  know  whether  that  is  a  bad  pun 
or  a  good  epigram ;  but  it  is  a  fact. 

The  last  time  that  I  had  the  privilege  and  the 
pleasure  of  addressing  this  distinguished  and  tre- 
mendously important  body  was  just  fourteen  years 
ago,  when  I  appeared  before  it  as  Chairman  of  the 
Trust  Company  section  of  the  Association.  I 
wasn't  a  trust  buster  then  and  I  am  not  one  now. 
I  knew  then,  as  I  know  now,  that  with  money  and 
resources,  as  with  an  army,  for  efficiency  there 
must  be  the  power  and  facility  for  concentration 
for  defense  or  attack,  that  there  must  be  guidance 
and  direction,  and  the  gathering  of  units  for  a  com- 
mon purpose. 


Your  units  are  dollars,  as  the  units  of  the  mili- 
tary commanders  are  men.  Your  real  business  is 
to  do  your  respective  parts  to  see  that  those  units 
are  marshaled  and  applied,  as  occasions  may  sug- 
gest, for  the  good  of  your  communities  and  the 
country,  taking  care  that  your  depositors  and 
stockholders  shall  have  their  fair  shares  of  the  re- 
sulting benefits  in  return  for  their  faith  and  enter- 
prise, and  that  you  shall  have  your  own  just  return 
for  your  labor  and  care  and  thought. 

My  understanding  of  democracy — not  in  its  po- 
litical meaning,  as  we  make  it  now,  not  in  its  de- 
rivative meaning,  but  in  the  significance  of  it  that 
all  of  us,  of  all  parties  here,  accept — is  that  brains 
honestly  used,  thrift  and  industry,  and  even,  if  you 
please,  good  luck,  allowed  to  us  by  the  unseen 
powers,  are  entitled  to  their  rewards.  The  diligent 
should,  and  must,  prevail.  The  courageous  will 
win  and  should  win.  The  strong  must  hold  and 
direct  power.  That  is  the  law  of  nature  and  of  the 
God  who  created  and  ordered  nature.  Thus  far  the 
law  of  the  jungle  and  the  law  of  human  life  hold  to- 
gether. The  difference  is  that  God  has  given  to  us 
soul  and  understanding. 

Some  of  us  have  learned  much  since  the  last  time 
I  had  the  honor  of  addressing  you;  some  of  us  by 
hard  and  painful  experiences;  some  by  careful  ob- 
servation and  earnest  study.  In  that  time  we  have 
seen  many  changes  in  conditions  and  standards, 


and  in  habits  of  thought.  We  are  getting  further, 
and  each  year  further,  from  the  law  of  the  jungle. 

Look  back,  gentlemen!  Not  so  many  hundred 
years  ago  we  bankers  were  classed  as  mere  money 
changers  and  usurers.  Our  predecessors  won  their 
gains  by  preying  on  the  necessities  of  kings  and 
nobles  and  common  people  alike.  That  was  the 
jungle  law  put  into  polite  and  elaborately  entang- 
ling and  ruinous  phrases,  supported  by  the  laws  of 
all  the  old  countries.  Now  and  then  it  was  found 
necessary,  in  England,  and  other  lands,  to  change 
the  laws  on  usury  and  decree  violent  penalties  to 
save  the  throne,  the  haughty  nobility  and  the  yeo- 
manry from  the  rapacity  of  the  money  lenders. 
The  forces  of  law  and  arms  were  set  up  against  the 
force  of  garnered  riches;  sword  and  rope  and  lash 
were  applied  in  attempts  to  check  the  ceaseless  en- 
croachments of  usurious  interest ;  but  in  these  mod- 
ern days  we  have  learned  that  the  dollar  has  a 
soul,  and  that  even  great  accumulations  and  gather- 
ings of  dollars  may  have  souls. 

In  this  connection  I  may  define  the  word  soul  as 
the  inspiration  of  a  real  and  high  purpose.  John 
Randolph,  of  Roanoke,  described  a  corporation  a^ 
a  thing  without  a  body  to  be  kicked  or  a  soul  to  be 
damned.  As  we  know  now,  many  of  us  by  pain- 
ful experience,  our  legislating  powers,  adminis- 
trative officers,  courts  and  labor  unions  have  found 
innumerable  ways  to  kick  corporations  and  the 
accumulations  of  capital  they  represent.     Perhaps 


partly  because  of  this  kicking  and  certainly  because 
of  what  I  may  call  the  improved  civilization  of  our 
standards  and  an  understanding  of  our  relations 
with  each  other,  our  corporations  and  our  dollars 
have  developed  and  are  developing  souls. 

We  are  learning  that  justice  and  mercy  are  sound 
business  principles  and  make  the  one  sure  founda- 
tion for  enduring  and  real  business  success.  If  the 
history  of  the  human  race,  of  countries,  communi- 
ties and  individuals  proves  any  one  fact,  that  fact  is 
that  no  community  can  thrive  permanently  or  con- 
tinue to  exist  where  the  few  gather  great  riches 
and  the  many  are  deprived.  In  the  jungle  the  ruth- 
less use  of  strength  or  craft,  the  sudden  spring  of 
overmastering  power  on  weakness,  the  stealthy  de- 
struction by  cunning  of  the  unwary,  are  appropri- 
ate. These  are  the  beasts  that  perish.  They  do 
not  build  or  think  for  the  future. 

We  of  the  human  kind  are  made  to  build,  to  es- 
tablish, to  plan  for  those  who  are  to  come  after  us, 
to  contribute  something,  each  as  he  can,  to  the 
permanency  and  usefulness  and  growth  and  great- 
ness of  our  nation.  We  know  the  only  real  pros- 
perity is  the  widespread  prosperity  in  which  all 
share;  that  the  one  assurance  for  stability  of  gov- 
ernment is  the  justified  contentment  of  the  masses 
of  the  people.  That  is  not  politics.  It  is,  maybe,  a 
trite  statement  of  the  conclusions  of  all  the  social 
and  economic  philosophies  and  of  the  opinions  of 
all  the  thinkers  of  all  parties  and  countries. 


But  it  is  like  some  of  the  principles  of  our  re- 
ligion. They  are  drilled  into  us  from  childhood  and 
live  in  our  memories.  We  recognize  their  theoreti- 
cal truth  and  beauty  and  value,  try  to  impress  them 
on  others — and  then  in  the  moment  of  opportunity 
or  temptation,  go  in  for  the  immediate  grab,  snatch 
at  the  fruit  of  profit  dangling  before  our  eyes ;  apply 
the  law  of  the  jungle,  forget  that  we  are  men,  and 
in  effect  become  tigers,  cormorants,  crocodiles, 
panthers — even  carrion  eaters  feasting  on  some 
commercial  carcass.  We  people  of  this  great  bank- 
ing world  of  ours  can  do  for  each  other  no  better 
service  than  to  continue  to  reiterate  to  each  other 
the  old  axioms  until  they  are  graven  on  our  hearts 
and  expressed  in  our  daily  transactions  and  in  our 
attitude  toward  our  customers  and  the  public. 

Gentlemen,  it  is  difficult  to  comprehend  the  enor- 
mous growth  in  strength  we  have  achieved  in  the 
fourteen  years  since,  as  a  banker,  I  addressed  your 
Association.  It  may  be  even  more  difficult  to  com- 
prehend the  corresponding  increase  of  our  respon- 
sibilities. We  have  outgrown  responsibility  to  our 
own  country  and  generation.  We  have  become  re- 
sponsible to  the  whole  world  because  we  have  be- 
come the  supreme  world  power,  especially  in  that 
vital  department  reaching  to  the  root  and  core  of 
all  things  which  we  here  directly  represent — the 
financial. 

We  have  become  responsible  for  the  future  of 
the  human  race.     This  republic  is  the  hope,  the 


refuge,  the  one  unshaken  and  unshakable  edifice 
among  all  that  mankind  has  built.  You  have  a 
homely — and  I  hope  a  familiar — illustration  in  your 
pockets.  Each  of  you  has  some  paper  money.  I 
venture  to  say  that  not  a  man  here  has  looked  to 
see  whether  the  notes  in  his  pocket  are  issued  by  a 
National  Bank  on  the  Pacific  or  the  Atlantic  Coast 
or  in  the  most  remote  country  town,  or  by  the 
Treasury  for  gold  or  silver  or  by  a  Reserve  Bank. 
All  any  of  us  look  at  is  the  denomination  and  the 
•'U.  S.  A." — the  United  States  of  America — the  sig- 
nature of  our  "Uncle  Sam."  We  know  that  stamp 
and  signature  make  that  piece  of  paper  as  good  as 
solid  gold,  not  only  here,  but  everjrwhere  in  the 
world.  And  it  is  virtually  the  only  paper  money 
that  is  received  everywhere  in  the  world  to-day  as 
representing  its  full  face  value  in  gold.  Our  dol- 
lars are  the  good  dollars  and  the  dominant  dollars. 
It  is  for  you  gentlemen,  controlling  the  powerful 
banking  interests  of  this  supreme  country,  to  de- 
termine whether  these  dollars  of  ours  shall  prey 
upon  our  own  country  and  the  world  with  teeth 
and  claws,  or  shall  have  souls  put  into  them  to  up- 
build, to  help  to  heal  the  horrible  scars  of  war;  to 
lift  the  stricken  to  strength  and  hope.  In  this  con- 
nection some  one  has  prettily  said  that  "By  doing 
good  with  his  money,  a  man  as  it  were,  stamps  the 
image  of  God  upon  it,  and  makes  it  pass  current 
for  the  merchandise  of  heaven." 


Let  us  look  a  moment  to  see  what  we  have  done, 
and  where  we  are  just  now.  I  have  said  some  of 
this  before  elsewhere,  but  the  facts  and  figures  are 
tremendously  impressive. 

No  nation  on  this  planet ;  no  nation  at  any  time 
in  the  world's  history,  has  ever  made  such  gigantic 
strides  forward  in  material  wealth,  in  commerce,  in 
industrial  growth,  or  shown  such  wonderful  ad- 
vance in  banking  resources,  deposits  and  in  savings 
as  has  this  country  of  ours  in  the  fourteen  years 
which  have  elapsed  since  I  last  had  the  pleasure 
of  addressing  you. 

I  will  try  to  avoid  details,  but  I  do  want  to  bring 
before  you  figures  expressive  of  our  country's 
growth  from  1902  to  1916,  which  must  arouse  the 
attention  of  every  citizen. 

Let  me  begin  with  our  national  banks,  whose 
total  resources  in  1902,  amounted  to  just  six  bil- 
lion dollars,  for  the  4,535  national  banks  then  in 
operation.  To-day  there  are  over  7,600  national 
banks  with  fourteen  billion  dollars  of  resources.  In 
this  brief  period  the  resources  of  national  banks 
have  doubled,  with  two  billion  dollars  of  additional 
resources  thrown  in  for  good  measure.  In  the  sum- 
mer of  1902  the  deposits  of  the  national  banks  were 
4,468  million  dollars.  At  the  time  of  the  June,  1916, 
call,  these  deposits  amounted  to  10,877  million  dol- 
lars, an  increase  of  6,409  million  dollars,  or  143 
per  cent. 


Deposits  in  our  national  banks  alone  now  exceed 
by  250  million  dollars  the  aggregate  deposits  held 
by  all  banks,  national  and  state,  including  trust 
companies,  in  1902 — just  fourteen  years  ago. 

In  1902  the  total  deposits  of  State  banks,  savings 
banks,  trust  companies  and  other  banking  concerns 
under  State  supervision  aggregated  six  billion,  one 
hundred  and  fifty-seven  million  dollars.  On  June 
30,  1916,  the  deposits  of  these  State  banks  and  trust 
companies  exceeded  15  billion,  470  million  dollars, 
an  increase  of  more  than  150  per  cent, 

I  trust  I  will  not  be  accused  of  talking  politics  if 
I  should  call  attention  to  the  pleasing  fact  that  the 
greatest  increase  in  deposits  of  both  national  and 
state  banks  (including  trust  companies)  which  was 
ever  made  in  any  three-year  period  in  our  country's 
history  has  taken  place  in  the  past  three  years.  It 
may  also  be  a  gratifying  discovery  to  you  gen- 
tlemen of  the  national  bank  section  to  learn  that 
while  the  deposits  of  state  banks  and  trust  com- 
panies have,  during  this  period,  increased  over  3,480 
million  dollars,  or  about  29  per  cent.,  the  deposits  of 
your  national  banks  increased  more  than  33^2  per 
cent.,  or  2,733  million  dollars,  showing  that  since  the 
passage  of  our  Federal  Reserve  Act,  which  was  ap- 
proved by  President  Wilson  December  23,  1913, 
the  deposits  of  the  national  banks  have  been  grow- 
ing decidedly  faster  than  the  deposits  of  the  state 
banks  and  trust  companies  throughout  the  country. 


The  tremendous  growth  in  wealth  and  banking 
power  which  these  figures  indicate  may  be  more 
fully  realized  when  I  tell  you  that  the  increase  alone 
in  deposits  in  all  banks  since  June,  1913,  exceeds 
by  500  million  dollars  the  total  amount  of  all  locins 
and  discounts  made  by  all  the  banks  in  the  United 
States — national  banks,  state  banks,  trust  compa- 
nies and  savings  banks,  for  all  purposes  of  trade, 
commerce,  industry,  agriculture  and  business  of 
every  kind,  as  late  as  the  year  1900. 

The  records  show  that  business  in  every  direc- 
tion has  expanded  so  enormously  that  the  total 
clearings  of  our  clearing  house  cities  which,  for  the 
year  ending  June  39,  1902,  aggregated  slightly  less 
than  112  billion  dollars,  amounted  for  the  year  end- 
ing June  30,  1916,  to  more  than  224  billion  dollars, 
an  increase  of  more  than  100  per  cent,  in  fourteen 
years.  These  colossal  figures  become  the  more  im- 
pressive when  we  consider  that  the  bank  clearings 
represent  only  about  40  per  cent,  of  the  total  bank 
transactions  in  these  clearing-house  cities. 

Is  it  not  hard  to  grasp  the  thought  that  this  coun- 
try of  ours,  which  in  1902  had  already  reached  a 
pinnacle  among  the  nations,  has  since  that  year 
doubled  the  volume  of  its  business  in  virtually  all 
the  great  cities  of  the  land? 

The  latest  census  records  as  to  manufactures  are 
those  for  the  year  1914,  taken  in  the  midst  of  the 
depression  which  followed  the  outbreak  of  the 
European  War.     Since  1914  manufacturing  inter- 


10 


ests  of  all  kinds,  as  we  all  know,  have  been  pro- 
digiously stimulated.  If,  however,  we  compare  the 
census  reports  giving  the  figures  for  1899,  as  to 
manufactures,  with  the  census  reports  for  1914,  we 
get  the  following  results : 

The  number  of  manufactories  increased  in  these 
15  years  from  207,000  to  275,000,  or  32  per  cent. 
The  average  number  of  workers  employed  in  fac- 
tories on  salaries  or  wages  increased  from  5,076,000 
in  1899  to  8  millions  in  1914,  an  increase  of  nearly 
3,000,000 — almost  60  per  cent. ;  while  the  value  of 
the  products  of  our  manufactories  was  increased 
from  11,406  million  dollars  to  24,246  million  dol- 
lars, an  increase  in  the  value  of  the  products  in  this 
period  of  nearly  13  billion  dollars,  or  112  per  cent. 

By  1902  the  United  States  had  become  the  great- 
est manufacturing  nation  on  earth,  and  her  output 
of  coal,  which  is  largely  the  basis  of  all  manufac- 
turing, had  reached  the  enormous  total  of  301  mil- 
lion tons,  already  far  exceeding  the  total  output  of 
Great  Britain,  formerly  the  greatest  coal-producing 
country  on  earth.  For  the  year  ending  June  30, 
1916,  the  official  estimates  place  the  coal  production 
of  this  country  at  601,900,000  tons,  which  is  just 
twice  our  production  in  1902,  our  production  of  coal 
for  the  past  year  being  far  greater  than  the  com- 
bined production,  even  in  normal  years,  of  the  Brit- 
ish Empire,  the  German  Empire,  and  the  Republic 


11 


of  France,  which,  next  to  this  country,  rank  as  the 
three  greatest  manufacturing  nations  on  earth. 

That  you  may  form  some  idea  of  the  enormous 
expansion  which  has  taken  place  in  the  iron  and 
steel  business  since  the  1914  census  as  well  as  since 
1902,  I  ask  your  attention  to  the  following  figures : 

The  production  of  pig  iron  for  the  year  ending 
June  30,  1914,  was  reported  at  27  million  tons ;  for 
the  year  ending  June  30,  1916,  the  output  is  given 
at  37  million  tons,  against  production  for  1902  of 
only  17  million  tons. 

The  output  of  iron  ore  for  the  year  ending  June 
30,  1914,  was  57  million  tons;  for  the  year  ending 
June  30,  1916,  the  production  was  66  million  tons, 
against  only  35  million  tons  in  1902. 

The  production  of  steel,  which  for  the  year  end- 
ing June  30,  1914,  was  given  at  27  million  tons,  had 
increased  for  the  year  ending  June  30,  1916,  to  39 
million  tons,  against  only  15  million  tons  in  the 
year  1902. 

The  story  of  our  railroads  for  the  period  from 
1902  to  1916  fully  corroborates  the  other  figures 
expressive  of  our  commercial  and  industrial 
growth.  Although  our  railroad  mileage  increased 
from  but  200,000  miles  in  1902  to  260,000  miles 
now,  the  latest  figures  available  indicate  that  300 
billion  ton  miles  of  revenue  freight  were  the  rec- 
ord for  the  year  ending  June  30,  1916,  against  157 
billion  ton  miles  in  1902. 


12 


The  gross  earnings  from  operations  of  these 
roads  for  1902  were  1,726  million  dollars.  Accord- 
ing to  the  latest  figures  obtainable,  these  earnings 
for  the  twelve  months  ending  June  30,  1916, 
amounted  to  3^?,  billion  dollars,  an  increase  of  ap- 
proximately 100  per  cent.,  while  net  earnings  from 
operations,  which  in  1902  were  reported  at  610 
million  dollars,  for  the  year  ending  June  30,  1916, 
reached  approximately  1,200  million  dollars— show- 
ing that  our  great  transportation  lines  are  enjoying 
as  a  whole  a  full  share  of  the  country's  prosperity 
and  are  very  far  from  being  run  at  a  loss. 

The  capitalization  of  the  railroads,  including 
bonds  and  stocks,  increased  during  this  period, 
approximately  from  12  billion  dollars  to  20  billion 
dollars. 

Progress  and  efficiency  are  shown  in  the  fact 
that,  while  we  have  now  about  a  million  more 
freight  cars  than  we  had  in  1902,  the  average  ca- 
pacity of  all  freight  cars  has  also  increased  from  28 
to  40  tons  per  car. 

This  country's  exports  in  merchandise  for  1902 
were  1,381  million  dollars.  For  the  past  fiscal  year, 
our  exports  aggregated  4,333  million  dollars.  In 
other  words,  our  exports  for  the  past  year  exceeded 
our  total  exports  in  1902  by  the  colossal  sum  of 
nearly  3  billion  dollars.  Our  imports  for  1902  were 
903  million  dollars.  In  the  fiscal  year  1916  they 
v.'ere  2,197  million  dollars.  Our  credit  balance  of 
trade  in  1902  was  478  million  dollars.    For  the  past 


13 


fiscal  year  it  was  2,135  million  dollars,  and  is  still 
growing. 

Patriotic  Americans  have  the  right  to  gloat  over 
such  a  showing  with  swelling  pride.  Ambitious 
Americans — and  ambition  is  one  of  the  chief  ele- 
ments of  patriotism — may  read  in  them  brilliant 
promise  of  a  future  of  almost  inconceivable  great- 
ness. Thoughtful  Americans  will  find  in  them 
cause  for  fear  that  wealth  may  betray  us  into  ra- 
pacity and  inequality  of  distribution  that  will  mean 
destruction;  or  cause  for  noble  dreams  and  hopes 
that  our  riches  may  be  applied  with  magnificent 
and  intelligent  benevolence,  to  bless  the  world  and 
augment  our  own  prestige,  power  and  accumula- 
tion. 

Rome,  mistress  of  the  world,  rotted  to  death 
from  wealth,  luxury  and  sloth.  The  internal  rela- 
tions of  her  people  with  each  other,  and  her  con- 
duct towards  other  peoples,  were  directed  by  the 
law  of  the  jungle.  We  can  share  Rome's  fate  only 
by  imitating  Rome.  We  are  in  a  world  infinitely 
vaster  than  Rome  knew.  We  can  hold  in  it  power 
and  place  far  beyond  the  wildest  vision  of  the 
proudest  Romans  if  we  will  absorb  the  teachings 
from  the  fates  of  the  peoples  who  have  gone  be- 
fore us  and  failed  miserably;  learn  to  regard  the 
highest  ideals  as  real  and  powerful  things;  accept 
as  a  firm  conviction  the  belief  that  as  a  nation  Prov- 
idence and  circumstance  have  entrusted  us  with  an 
actual  mission. 


14 


The  ancient  historians  tell  us  that  a  census  of 
Roman  citizens  was  taken  in  the  reign  of  the  Em- 
peror Augustus,  about  the  time  of  the  birth  of 
Christ,  and  that  the  number  was  estimated  at  25 
millions,  including  the  districts  and  provinces  of 
Italy,  Gaul,  Spain,  the  Balkan  Peninsula,  Greece, 
Asia  Minor,  Syria,  Egypt,  Northern  Africa,  and  the 
islands  in  the  Mediterranean. 

Gibbon,  the  historian,  estimated  that  the  reve- 
nues from  the  provinces  of  the  Roman  Empire  were 
the  equivalent  of  about  100  million  dollars  of  our 
gold. 

The  annual  revenues  of  the  United  States  Gov- 
ernment at  this  time  are  1,000  million  dollars  per 
annum,  or  ten  times  the  revenue  of  the  ancient  Em- 
pire of  Rome  in  the  Golden  Age;  while  the  total 
incomes  of  the  people  of  the  United  States  in  the 
past  twelve  months  are  estimated  to  have 
amounted  to  not  far  from  35  billion  dollars,  and  the 
people's  savings,  over  and  above  their  cost  of  liv- 
ing, to  between  six  and  seven  billion  dollars. 

It  is  worth  our  while  to  turn  our  minds  back  over 
nineteen  crowded  centuries,  to  reflect  that  Rome 
was  where  we  are — the  greatest,  strongest,  richest 
power  of  the  known  world.  There  is  solemnity  and 
seed  for  wisdom  in  the  reflection  that  Rome  was; 
and  perished.  At  the  very  zenith  of  her  power  and 
pride  and  wealth,  the  same  Augustus  who  took  the 
census  foresaw  for  her  the  same  perils  thoughtful 
ijnen  now  foresee  for  our  own  Republic.     He  at- 


15 


tempted  measures  of  reformation,  of  preparation, 
of  prevention  against  disaster,  which  it  will  be  well 
for  us  to  consider  thoughtfully.  "In  all  times  of 
our  adversity,  in  all  times  of  our  prosperity,  in  the 
hour  of  death  and  in  the  day  of  judgment,  Good 
Lord,  deliver  us"  runs  the  Litany.  Men  wise  as 
Caesar  Augustus  wrote  that  for  us  to  use  in  our 
prayers.  They  understood,  as  he  did,  that  the  dan- 
gers of  prosperity  are  as  deadly  as  those  of  ad- 
versity, death  and  judgment;  and  that  pride,  vain- 
glory and  hypocrisy  may  destroy  congregations 
and  nations  as  they  do  individuals.  Countless 
sages  and  thinkers  have  given  us  the  same  thought 
and  warning.    Kipling  expresses  it  musically: 

If,  drunk  with  sight  of  power,  we  loose 
Wild  tongues  that  have  not  Thee  in  awe — 
Such  boasting  as  the  Gentiles  use, 
Or  lesser  breeds  without  the  law — 
Lord  God  of  Hosts,  be  with  us  yet. 
Lest  we  forget — Lest  we  forget ! 

Froude  tells  us  of  the  Emperor  Augustus,  that 
under  his  reign — 

"Society  had  grown  ashamed  of  its  orgies, 
and  returned  to  simpler  habits  of  life,  and  the 
Emperor  led  the  way  in  the  reform.  Like 
Charles  V,  Augustus  banished  plate  from  his 
household,  and  was  served  with  the  plainest 
food  on  the  plainest  earthenware.   *   *   *   His 


16 


furniture  was  scarcely  fine  enough  for  a  pri- 
vate gentleman.  His  dress  was  homespun, 
not  distinguishable  from  the  dresses  of  his  at- 
tendants, and  to  emphasize  the  example,  was 
manufactured  by  the  Empress  and  his  daugh- 
ter. *  *  *  He  was  punctilious  in  each  and  all 
of  his  religious  observances.  =s=  *  * ;  and  dur- 
ing his  long  reign  the  harassed  peasant,  who 
at  last  could  till  his  farm  and  eat  his  bread  in 
safety,  poured  libations  with  unhesitating  faith 
to  the  divinity  of  the  Emperor." 

Here  and  now,  each  of  us  sovereign  by  right  of 
birth,  each  of  us  entrusted  by  Providence  with 
power  among  his  fellow  sovereigns,  may  realize 
profitably  how  well  we  might  use  that  power  by 
promotion  of  the  habits  of  simplicity  and  austerity. 
It  is  easy  to  imagine  that  if  the  principles  taught 
by  the  great  emperor  had  become  part  of  the  per- 
manent life  of  the  Roman  people,  the  power  of 
Rome  would  have  remained  unshaken.  It  is  easy 
to  know  that  if  this  nation  of  ours  is  given  over  to 
luxury  and  riot,  to  huge  wealth  unequally  divided, 
to  effeminacy  on  one  side  and  misery  and  rage  on 
the  other,  our  destruction  will  come  surely,  swiftly 
and  shamefully,  without  even  the  alleviation  of 
pity  or  sympathy,  with  all  the  added  ignominy  of 
the  world's  contempt,  and  the  knowledge  that  we 
will  live  in  history,  not  as  an  example  of  grandeur, 
but  as  an  instance  of  disgraceful  failure. 


17 


The  wealth  of  this  country  at  this  time  has  be- 
come so  vast  as  to  be  beyond  the  comprehension  of 
the  average  mathematician,  and  we  are  learning 
now  to  think,  financially  and  industrially,  in  astro- 
nomical units. 

We  have  to-day  a  population  of  more  than  100 
million  people,  with  more  than  40  million  men, 
women  and  children  engaged  in  gainful  occupation 
— employed  in  the  creation  of  more  wealth — piling 
Pelion  on  Ossa. 

If  we  should  divide  the  new  wealth  created  an- 
nually among  all  the  men,  women  and  children  en- 
gaged at  work,  they  would  have  not  far  from 
$1,000  per  year  each. 

It  would  not  be  difficult  for  this  nation,  by  econ- 
omy, thrift  and  efficient  work,  to  increase  its  an- 
nual savings,  which  two  or  three  years  ago  were 
estimated  by  expert  English  economists  at  five 
billion  dollars  per  annum,  to  ten  billion  dollars  per 
annum;  and  this  huge  sum  could  then  be  used  to 
help  forward  the  development  of  our  own  country ; 
for  the  promotion  of  civilization  and  for  the  ad- 
vancement and  upbuilding  of  the  near  and  remote 
countries  of  the  earth.  But,  while  we  are  planning 
gigantic  schemes  for  world  development,  let  us  not 
forget  that  the  most  immediate  and  vital  business 
duties  which  lie  before  us  relate  to  the  upbuilding 
of  our  home  enterprises,  especially  the  smaller  fac- 
tories and  mills  and  development  undertakings  in 
the  lesser  cities  and  towns  and  in  our  country  dis- 


18 


tricts.     Those  provide  the  surest  and  safest  foun- 
dation on  which  to  erect  national  wealth. 

They  keep  money  at  home  in  local  banks  and  in 
active  circulation  in  the  territory  in  which  the 
laborer  lives  and  where  the  capital  is  invested. 
They  provide  work  for  home  people,  employment 
for  home  capital  and  energy,  trade  for  home  mer- 
chants. They  make  also  opportunity  for  talent  and 
give  means  of  sturdy  resistance  to  encroachments 
on  the  pockets  of  the  people  by  great  monopolies. 
They  tend  directly  toward  promotion  of  the  inti- 
mate and  cordial  relations  between  employers  and 
employees  of  all  grades,  which  make  for  ideal  con- 
ditions. 

In  a  letter  which  I  had  the  honor  to  receive  some 
years  ago  from  England's  great  statesman,  Mr, 
Gladstone,  he  spoke  of  the  vast  power  of  produc- 
tion of  this  country,  and  predicted  that  the  time 
would  come  when  our  wealth  would  overflow  into 
other  lands.  This  predicted  hour  has  struck.  The 
time  has  come,  and  our  wealth  is  already  overflow- 
ing into  other  lands  with  a  rush  and  abundance 
never  before  witnessed  in  the  history  of  commerce 
or  of  finance. 

Students  of  the  situation  estimate  that  this  coun- 
try is  now  creating  wealth  over  and  above  the  liv- 
ing expenses  of  the  people  at  a  rate  four  or  five 
times  greater  than  the  savings  of  the  British  peo- 
ple at  the  time  when  their  income  was  greatest  and 


19 


their  investments  in  foreign  countries  were  at  the 
maximum. 

Just  two  years  ago,  after  the  outbreak  of  the 
European  War,  we  were  considering  how  we  could 
find  means  to  meet  our  floating  debt,  estimated  at 
350  million  dollars,  in  gold,  which  was  to  mature  in 
Europe  between  September  first  and  December 
thirty-first,  1914,  and  what  we  should  do  to  avert 
financial  calamity  if  the  European  nations  should 
begin  to  unload  upon  us  their  American  securities, 
of  which  they  held  an  amount  then  estimated  at 
four  to  four  and  a  half  billion  dollars.  In  the  two 
years  which  have  intervened  we  have  paid  this 
floating  debt  in  full,  have  bought  back  of  the  Amer- 
ican securities  held  abroad  an  amount  estimated  at 
between  two  and  three  billion  dollars,  and  have 
loaned  to  foreign  nations  in  both  hemispheres  one 
and  a  half  billion  dollars  of  new  money. 

If  a  balance  should  be  struck  to-day,  taking  into 
account  the  amount  of  our  securities  still  held  in 
foreign  countries  and  the  amount  due  our  people 
on  account  of  their  foreign  investments,  the  prob- 
abilities are  that  we  would  find  ourselves  for  the 
first  time  in  our  history,  a  distinctly  creditor  nation. 
We  hold  a  mortgage  on  the  world's  physical  as- 
sets. The  world  holds  a  mortgage  on  our  soul,  on 
our  good  will  and  broad  nobility  of  purpose. 

Gentlemen,  all  of  us  know  the  self-multiplying 
power  of  money,  the  capacity  of  wealth  to  propa- 
gate and  increase  itself.    The  law  of  gravitation,  as 


20 


we  know,  applies  in  finance  as  in  the  physical 
world.  Huge  accumulations  of  values  naturally 
draw  to  themselves  the  lesser  masses.  Seeing  how 
we  have  grown  in  fourteen  years  from  the  basis  we 
had  in  1902,  imagination  is  baffled  by  the  possibili- 
ties for  the  coming  fourteen  years  from  the  basis 
we  have  now.  But  it  is  for  us  here  to  keep  steadily 
in  our  minds  that  the  only  real  wealth,  after  all,  is 
the  common  wealth,  that  wealth  to  endure  and  go 
on  accumulating  must  be  used  for  the  common 
weal.  A  superstructure  of  great  fortunes  based  on 
a  foundation  of  general  poverty  and  discontent 
must  topple  and  crumble  as  surely  as  a  house 
builded  on  the  sands.  We  see  what  we  have.  We 
can  but  vaguely  imagine  what  we  will  have  if  we 
will  look  carefully  to  our  foundations  and  be 
guided  by  the  practical  business  sense  represented 
in  the  best  ideals.  The  altruistic  conception  of  our 
duties  to  each  other  is  not  a  vapor  or  a  rainbow 
vision.  It  will  come  out  right  and  show  satisfac- 
tory results  under  the  keenest  analysis  and  the 
coldest  dissection. 

By  spontaneous,  inward  growth,  by  natural 
strength,  by  the  inborn  restless,  tireless  enter- 
prise and  industry  and  productive  power  of  our 
people,  we  have  expanded  enormously.  Certainly 
no  men  in  the  country  have  done  more  to  bring 
these  wonderful  results  than  the  bankers  of  the 
United  States.  It  will  interest  you  to  know  that 
our  National  Banks  are  now  manned  by  an  army 


21 


of  about  seventy-five  thousand  men,  including  offi- 
cers, clerks  and  other  employees,  generally  able, 
faithful  and  efficient,  with  a  payroll  of  nearly  a 
hundred  millions  a  year,  operating  on  a  capital  of 
more  than  a  thousand  million  dollars  contributed 
by  441,000  stockholders,  and  having  as  clients  over 
fourteen  million  depositors. 

Charged,  as  I  happen  to  be,  with  the  sometimes 
ungracious  and  unwelcome  task  of  supervising 
their  conduct  of  their  own  affairs  and  scrutinizing 
the  most  intimate  details  of  their  business,  it  is  a 
real  pleasure  to  me  to  bear  witness  to  the  high 
character,  the  incalculable  usefulness,  the  con- 
scientious devotion  to  duty  and  the  breadth  of  view 
and  purpose  of  the  average  American  banker.  He 
combines  the  functions  of  a  driving  power  and  a 
balance  wheel,  an  accelerator  and  a  brake.  Maybe 
I  know  as  much  about  him  (although  I  do  not  wish 
you  to  understand  from  that  that  I  am  a  Me- 
thusaleh)  as  any  man  alive ;  as  an  American  citizen 
I  am  pleased  to  say  that  I  am  proud  of  him.  Nine 
times  in  ten  I  take  even  his  most  vigorous  kicks 
against  my  administration  as  evidence  of  his  self- 
respect  and  American  spirit  of  assertion  of  what  he 
may  believe  to  be  his  rights. 

Please  do  not  construe  that  statement,  gentle- 
men, as  an  invitation  for  additional  kicks.  I  have  a 
plenty,  thank  you.  I  am  one  of  those  individuals 
who  must  find  consolation  in  consciousness  of 
good  intentions,  and  in    faith  that,    instead  of  being 


a  part  of  the  pavements  of  Hades,  they  will  be 
found  presently  smoothing  the  thoroughfares  of 
commerce  here ;  and  I  have  the  hope  that  presently 
it  may  be  said  of  me,  "After  all,  he  performed  his 
duty  as  he  saw  it  and  really  did  do  some  good." 
That  is  about  the  best  most  of  us  can  hope  for.  As 
I  think  I  have  said  before,  gold-headed  walking 
sticks  of  loving  cups  with  inscriptions  or  en- 
grossed votes  of  thanks  come  to  comparatively  few 
of  us  when  our  duties  forbid  us  to  be  invariably  af- 
fable and  universally  urbane  and  complaisant.  I 
have  found  some  satisfaction  in  the  statement  of 
General  Goethals,  who,  in  reviewing  his  own  ex- 
periences, said  that  he  had  learned  the  important 
lesson  that  "a  man's  usefulness  in  the  public  ser- 
vice is  determined  by  the  abuse  and  criticism  he 
can  take  without  complaining." 

With  your  permission  I  will  here  answer  a  ques- 
tion which  critics  of  the  Federal  Reserve  System 
have  sometimes  asked  as  to  whether  our  national 
banks  continue  to  be  profitable  to  their  share- 
holders. 

I  am  gratified  to  be  able  to  tell  you  that  notwith- 
standing the  lower  interest  rates  which  have  pre- 
vailed since  the  inauguration  of  the  Federal  Re- 
serve System,  and  despite  the  fact  that  Federal 
Reserve  Banks  pay  no  interest  on  reserve  balances, 
the  latest  official  returns  of  the  national  banks  in- 
dicate that  in  the  aggregate  their  earnings,  both 
gross  and  net,  are  now  far  greater  than  at  any  pre- 


23 


vious  period  in  the  history  of  the  national  banking 
system. 

In  1899  the  gross  earnings  of  all  national  banks 
were  less  than  150  million  dollars  and  their  net 
earnings  slightly  under  50  million  dollars.  For  the 
calendar  year  1916  the  indications  are  that  the 
gross  earnings,  based  upon  the  actual  returns  for 
the  first  six  months,  will  approximate  600  million 
dollars,  and  net  earnings  over  and  above  all  ex- 
penses and  losses  170  million  dollars. 

Since  1899  the  capital  of  national  banks  has  in- 
creased 75  per  cent.,  while  the  net  earnings  on  the 
above  basis  have  increased  about  240  per  cent.  In 
1899  national  banks  earned  on  their  604  millions 
aggregate  capital  stock  a  fraction  over  8  per  cent. 
The  current  year  the  figures  thus  far  received  indi- 
cate that  they  will  earn  approximately  16  per  cent, 
on  their  total  capital  stock  of  1,070  million  dollars. 
In  1899  the  national  bank  surplus  was  248  million 
dollars.  Now,  the  surplus  fund  of  the  national 
banks  is  730  million  dollars.  Undivided  profits  in 
1899,  94  million  dollars;  now,  they  amount  to  305 
million  dollars. 

My  attention  was  directed  recently  to  newspaper 
statements  to  the  effect  that  national  banks  are 
week  by  week  surrendering  their  Federal  charters 
and  taking  out  State  charters  instead,  and  that  the 
number  of  national  banks  "is  decreasing  instead  of 
increasing."  That  statement  is  squarely  contra- 
dicted by  the  facts.    From  the  opening  of  the  Fed- 


24 


eral  Reserve  Banks  November  16,  1914,  to  Sep- 
tember 16,  1916,  one  year  and  ten  months,  the 
Comptroller's  office  has  issued  charters  to  248  new- 
national  banks,  with  an  aggregate  capital  of 
$15,249,500.  During  the  same  period  180  National 
banks  increased  their  capital  to  the  extent  of 
$20,762,700.  The  aggregate  number  of  new  charters 
and  banks  increasing  their  capital  was  therefore 
428  and  the  aggregate  new  capital  authorized 
$36,012,200.  During  the  same  period  133  banks 
other  than  those  consolidating  with  other  national 
banks  went  into  liquidation,  their  aggregate  capital 
being  $11,183,000;  33  banks  reduced  their  capital 
in  the  same  time  to  the  extent  of  $2,710,000,  so  that 
the  total  number  of  banks  liquidating  or  reducing 
their  capital  other  than  those  consolidating  with 
other  national  banks  was  166  with  capital  reduction 
of  $13,893,000.  In  addition  to  the  above,  during 
this  same  period  there  were  27  national  banks 
placed  in  charge  of  receivers;  representing  an  ag- 
gregate capital  of  $2,635,000.  Of  this  number, 
eight  with  an  aggregate  capital  of  $530,000  have 
been  restored  to  solvency. 

The  records  thus  show  that  since  the  opening  of 
the  Federal  Reserve  System,  (excluding  the  banks 
consolidating  with  other  national  banks),  the 
number  of  new  banks  chartered  plus  the  number 
of  existing  national  banks  which  have  increased 
their  capital  exceed  by  243  the  number  of  national 
banks  which  have  gone  into  liquidation  or  which 


35 


have  reduced  their  capital,  and  the  capital  of  the 
newly  chartered  banks  plus  the  increased  capital  of 
existing  banks  exceeds  by  $20,014,200  the  capital 
of  all  national  banks  which  have  gone  into  liquida- 
tion or  which  have  reduced  their  capital.  The 
Comptroller's  ofBce  has  also  refused  about  thirty 
applications  for  charters  for  new  national  banks 
during  the  same  period. 

When  the  Federal  Reser\'^e  Act  became  a  law  the 
friends  of  that  measure  confidently  predicted  that 
three  principal  results  would  follow: 

First,  that  the  rates  for  money  would  be  reduced 
throughout  the  country,  and  that  there  would  be 
a  general  equalization  of  interest  rates.  That  this 
result  has  been  accomplished  is  universally  admit- 
ted. Arguments  on  this  point  would,  therefore,  be 
useless. 

Second,  the  prediction  was  made  that  with  the 
inauguration  of  a  sound,  elastic  and  scientific  cur- 
rency system,  business  of  all  kinds  would  be  placed 
upon  a  stronger  and  firmer  foundation  and  that  in- 
creased business  activity  would  follow.  This  prom- 
ise has  also  been  splendidly  fulfilled. 

A  third  prediction  was  that  with  the  institution 
of  this  new  financial  system  bank  failures  would  be 
greatly  reduced,  if  not  entirely  eliminated,  and  I 
now  ask  your  attention  to  figures  which  will  en- 
able you  to  determine  for  yourselves  how  far  this 
expectation  is  being  realized. 


26 


The  Federal  Reserve  Board  was  organized  on 
August  12,  1914,  and  the  Federal  Reserve  System 
began  business  November  the  same  year.  For  the 
twelve  months  immediately  preceding,  namely,  for 
the  period  ending  June  30,  1914,  nineteen  national 
banks  failed  with  liabilities  aggregating  $39,- 
952,000.  For  the  twelve  months  ending  June  30, 
1915,  including  seven  and  a  half  months  of  the 
operations  of  the  Federal  Reserve  System,  there 
were  sixteen  national  bank  failures  with  liabilities 
aggregating  $15,972,000.  For  the  twelve  months 
ending  June  30,  1916,  the  first  complete  fiscal  year 
under  the  new  system,  there  were  fifteen  national 
bank  failures  with  aggregate  liabilities  of  only 
$3,838,000. 

This  shows  that  for  the  first  full  fiscal  year  un- 
der the  operations  of  the  Federal  Reserve  System 
the  liabilities  of  the  failed  national  banks  amounted 
to  less  than  one-tenth  of  the  liabilities  of  the  na- 
tional banks  which  failed  in  the  year  immediately 
preceding  the  inauguration  of  the  system,  and 
those  banks  which  failed  during  the  past  twelve 
months  were  generally  small  concerns  whose  fail- 
ures were  traceable  directly  to  criminal  acts  of 
management — defalcations,  embezzlements,  etc., 
which  it  is  practically  impossible  entirely  to  elim- 
inate under  any  banking  system,  although  under 
our  improved  methods  of  bank  examination  these 
are  now  being  reduced  to  a  minimum. 


87 


You  may  also  be  interested  in  receiving  further 
facts  as  to  the  fifteen  banks  which  failed  during  the 
last  fiscal  year,  and  whose  liabilities,  as  I  have 
stated,  aggregated  only  $3,838,000.  Two  of  these 
banks  already  have  resumed  operations;  five  more 
already  have  paid  or  are  expected  to  pay  depositors 
100  cents  on  the  dollar,  and  the  remainder  are  ex- 
pected to  pay  from  65  per  cent,  to  95  per  cent,  of 
their  liabilities. 

It  is  estimated  that  the  total  ultimate  losses  to 
depositors  from  the  failure  of  the  fifteen  banks 
which  closed  during  the  year  ending  June  30,  1916, 
will  be  less  than  $250,000.  As  the  total  liabilities 
of  all  national  banks,  exclusive  of  capital,  surplus 
and  undivided  profits,  during  this  period  amounted 
to  about  12  billion  dollars,  is  it  not  tremendously 
reassuring  to  learn  that  the  proportion  of  losses  to 
depositors  and  other  creditors  of  our  national  banks 
for  the  past  year  has  been  only  two  dollars  per 
each  one  hundred  thousand  dollars  of  liabilities? 
On  this  basis  an  insurance  company  could  afford 
to  guarantee  the  deposits  of  a  bank  with  a  million 
dollars  of  deposits  for  a  yearly  premium  of  $20 
and  a  bank  with  $10,000,000  of  deposits  could  se- 
cure for  its  depositors  immunity  from  loss  at  a  cost 
of  about  $200  per  annum. 

So  much  for  what  the  Federal  Reserve  System  is 
already  doing  for  us.  As  is  said  of  matrimony,  it 
divides  our  cares  and  multiplies  our  joys.  Our  new 
banking  and  currency  system  has  been  given  to  us 


28 


fortunately  precisely  at  the  time  in  the  world's  his- 
tory when  it  was  most  vitally  needed  and  when  its 
power  for  good  not  only  to  us,  but  to  all  the  na- 
tions of  the  world,  could  be  most  widely  and  most 
advantageously  exercised. 

But  looking  back  and  looking  ahead,  I  am  pro- 
foundly and  tremendously  impressed  by  the  unpre- 
cedented and  almost  inconceivable  opportunity 
now  before  this  United  States,  this  Republic  of 
ours,  and  especially  before  the  men  of  your  profes- 
sion— for  banking  has  long  since  grown  from  the 
position  of  an  ignoble  trade  to  that  of  a  noble  and 
honored  profession.  We  have  been  forced  by  our 
own  growth  out  of  the  trammels  and  confines  of 
timidity  and  isolation  our  forefathers  wove  about 
us  while  we  were  a  feeble  folk  and  wisely  afraid. 
We  have  been  born  into  the  world  almost  in  a  mo- 
ment, full  grown — I  hope  and  believe  with  teeth. 
We  are  not  only  a  world  power.  We  are  the  world 
power.  While  nearly  every  other  country  has  been 
depleted,  we  have  been  augmented.  Our  credit 
and  resources  are  inexhaustible.  Our  population  is 
intact  and  increasing,  our  cities  are  unmarred,  our 
many  millions  of  acres  of  soil  are  tilled  in  peace,  our 
natural  resources  find  profitable  and  constant  out- 
let. 

Our  deposits  in  all  the  banks  throughout  the 
United  States  at  this  time  are  so  huge  that  if 
there  should  be  withdrawn  from  these  banks  an 
amount  of  deposits  equal  to  the  total  resources  at 


29 


this  time  of  the  Bank  of  England,  the  Bank  of 
France,  the  Bank  of  Spain,  the  Bank  of  the  Neth- 
erlands, the  Bank  of  Norway,  the  Bank  of  Sweden, 
the  national  Bank  of  Switzerland,  and  the  Imperial 
Bank  of  Japan  all  combined,  the  deposits  of  our 
banks  would  still  be  considerably  greater  than  they 
were  three  years  ago,  at  the  beginning  of  the  pres- 
ent administration. 

To  follow  several  distinguished  examples  and 
come  to  the  vernacular,  gentlemen,  it  is  up  to  you. 
No  nation  in  the  world's  history  has  had  the  op- 
portunity this  nation  of  ours  will  have,  at  the 
ending  of  the  European  War,  for  self-building  and 
for  raising  to  their  feet  a  sad  procession  of  ex- 
hausted nations. 

And  in  this  connection,  let  me  suggest,  deferen- 
tially, not  to  say  timidly,  another  thought.  In  my 
recent  intimacies  with  the  machinery  of  our  Gov- 
ernment, in  its  legislative  and  executive  depart- 
ments especially,  I  have  been  impressed  by  the 
advantage  and  importance  of  having  practical  busi- 
ness men  in  our  politics.  My  study  of  history  and 
of  latter-day  conditions  has  impressed  on  me  that 
a  curious  reversal  of  process  sometimes  has  oc- 
curred. While  banking,  the  handling  and  lending 
of  money,  which  used  to  be  regarded  as  one  of  the 
most  ignoble  of  trades,  sometimes  proscribed  by 
law,  has  risen  to  the  dignity  of  an  honored  and  tre- 
mendously important  profession,  politics,  which 
in  olden  times  used  to  be  the  most  important  of 


30 


all  professions,  enlisting  the  labor  and  thought  of 
the  greatest  men,  has  in  recent  years  shown  now 
and  then  a  tendency  to  descend  to  the  level  of  ig- 
noble and  selfish  trade.  We  need  in  our  offices,  and 
in  all  our  political  affairs,  more  men  who  will  regard 
office-holding  and  political  work,  not  as  the  last 
hopes  of  earning  precarious  livings  or  winning  tem- 
porary distinction,  but  honestly  as  opportunity  for 
doing  real  good  for  the  country  and  their  communi- 
ties. I  realize  as  clearly  as  any  of  you  how  distaste- 
ful practical  politics  is  to  most  business  men.  I 
recall  the  story  of  a  voter — maybe  an  average 
American  voter — down  South,  who,  when  asked  to 
vote  for  a  prominent  and  useful  citizen,  replied  with 
scorn  and  indignation,  "Vote  for  him?  Why,  he's 
a  rich  man !  I'd  as  leave  vote  for  old  banker  Simp- 
son." Mr.  Simpson  was  the  leading  banker  of  the 
county,  probably  the  ablest  and  most  useful  man  in 
it,  and  had  never  committed  any  offense  but  to  be  a 
successful  business  man  and  banker,  in  whose  life 
and  methods  not  a  flaw  could  be  found. 

My  own  conscience,  I  confess  to  you  frankly,  is 
very  bad  on  that  point.  To  my  discredit,  be  it  said, 
I  suppose  I  never  in  my  life  attended  more  than  a 
half  dozen  ward  or  precinct  meetings.  Most  of  the 
time  I  would  have  found  it  hard  to  name  off- 
hand the  aldermen  or  councilmen  from  my  own 
ward,  and  often  went  to  the  polls  with  hazy  ideas 
of  who  was  running  and  of  what  and  who  the  can- 
didates were.    This  is  all  wrong.    You  know  it  and 


31 


I  know  it.  We  business  men,  especially  we  bank- 
ers, are  much  given  to  growling  about  political  con- 
ditions, the  leadership  and  management  of  our  re- 
spective parties.  Frequently  our  growling  is  jus- 
tified by  the  facts,  but  usually  we  have  had  no  right 
to  utter  it,  because  we  have  shrunk  from  lifting 
hand  or  voice  to  bring  improvement. 

Regardless  of  the  political  parties  to  which  we 
may  severally  belong,  we  would  be  ungenerous 
were  we  not  to  acknowledge  that  our  country  has 
been  singularly  fortunate  in  having  had  at  the  head 
of  its  Treasury  Department  when  the  world  crisis 
arose  two  years  ago,  and  when  our  country  was 
called  on  to  solve,  and  did  solve  most  successfully, 
problems  of  unprecedented  perplexity  and  moment, 
a  man  who  has  proved  himself  equal  to  every  exi- 
gency which  has  arisen  and  whose  experience,  skill 
and  splendid  ability  have  been  such  tremendous 
factors  in  guiding  us  through  menacing  perils  to 
stability  and  prosperity.  Problems  which  loomed 
so  large  in  years  that  have  passed  and  which  were 
dealt  with  by  such  masterful  men  as  Hamilton,  Gal- 
latin, Chase,  McCuUoch  and  Sherman  seem  small 
compared  with  those  which  our  country  has  faced 
and  triumphantly  solved  under  the  administration 
of  our  courageous,  untiring  and  resourceful  Secre- 
tary of  the  Treasury,  William  Gibbs  McAdoo. 

I  have  endless  faith  in  the  capacity  of  the  Ameri- 
can people,  and  especially  the  American  business 
men,  to  discover  and  rectify  their  own  errors  be- 


32 


fore  the  resulting  damage  is  irreparable.  There- 
fore I  cherish  the  hope  that  the  time  will  come 
when  more  of  our  Americans  who  have  achieved 
distinction  in  other  vocations  will  realize  that  they 
owe  personal  service  to  the  country  in  which  they 
have  prospered  and  succeeded  and  will  acquire  the 
habit  of  adopting  politics  as  a  career  and  opportu 
nity,  and  will  give  their  riper  years  and  the  influence 
they  have  won  to  leadership  of  their  fellow  citizens, 
defying  the  annoyances,  the  disappointments,  the 
stings,  that  inevitably  accompany  such  work.  It  is 
as  well  worth  while  to  endure  such  things  for  the 
welfare  of  people  and  country,  as  to  endure  them, 
as  all  of  us  must,  for  the  piling  up  of  money.  As  I 
have  said  before,  on  another  occasion,  political  ac- 
tivity within  the  limits  of  good  citizenship  applied 
to  productive  endeavor  is  a  solemn  duty.  Politics 
as  a  diversion  of  earned  and  safe  leisure  is  a  useful 
amusement.  Politics,  when  a  man  has  achieved 
success  in  his  personal  affairs  and  contributed  his 
personal  part  toward  the  upbuilding  of  his  com- 
munity and  the  establishment  of  his  family,  offers 
noble  occupation.  Politics  as  a  business,  a  trade,  a 
dependence,  a  means  to  mere  selfish  ambition,  for 
young  men,  is  crowded  with  dangers,  thronged 
with  foes  to  character  and  manhood,  ambushed  at 
every  step.  Eminence  is  a  fruit  we  can  afford  to 
pluck  only  when  we  ourselves  are  ripe.  For  the 
weak  and  untried,  it  is  poison,  the  most  ruinous  of 


33 


intoxicants.  It  is  for  strong  men,  proved  strong 
and  toughened  by  toil  and  by  doing. 

It  is  a  strange  contradiction  that  many  of  us  who 
encourage  the  younger  men  to  accept  the  dangers 
and  privations  of  military  service  for  the  sake  of 
Hag  and  country  and  people,  ourselves  cower  away 
from  the  suspicions  of  the  rabble  or  the  worse  criti- 
cisms of  blackguards  or  opponents. 

That  is  a  matter  intimately  associated  with  my 
general  theme,  but  a  little  aside  from  it.  We  should 
keep  in  mind  our  personal  duty  to  our  own  country. 
We  cannot  forget  that  before  we  can  be  of  perma- 
nent value  to  the  world  and  hold  permanent  power 
in  it,  we  must  make  ourselves  and  our  own  internal 
affairs  clean  and  strong  and  inspired  by  high,  clean 
and  plain  purpose.  Maybe  the  two  tasks  will  react 
to  each  other — that  as  we  appreciate  our  responsi- 
bilities as  the  world  power,  we  will  realize  the  need 
for  new  and  better  forces  applied  to  our  internal 
political  machinery;  and  that  as  we  purify  our- 
selves, our  conceptions  will  be  higher  and  vision 
broader  and  clearer.  However  that  may  be,  it  is 
certain  that  just  before  us,  a  few  months  or  two  or 
three  years,  a  mighty  task  is  to  be  done  to  reorgan- 
ize and  re-establish  the  nations  of  the  earth..  Let 
us  do  whatever  the  genius,  the  power,  the  talent 
for  reorganization  and  administration  of  our  coun- 
try can  do.  We  have  the  right  to  do  it  to  our  own 
profit.     But  it  is  our  duty  and  our  opportunity  to 


34 


let  the  word  "fair"  go  hand  in  hand  with  the  word 
"profit." 

Let  us  have  the  great  American  soul  go  in  com- 
pany with  the  great  American  dollar.  You  bankers 
can  see  to  that.  You  can  see  that  the  spirit  of  civil- 
ization and  man  thought,  and  purpose,  shall  banish 
the  law  of  the  jungle  and  the  mere  animals.  We 
should  take  no  advantage  of  necessity  to  extort 
hard  terms,  at  home  or  abroad,  as  did  the  usurers 
and  money  changers  before  banking  advanced  from 
proscribed  and  furtive  trade  to  honored  profession. 

Without  loss  or  risk  to  ourselves,  we  may  win 
for  our  Republic  a  place  never  before  held  by  any 
country.  It  is  not  only  possible,  but  comparatively 
easy  for  us  to  stand  with  none  jealous  of  us  or 
afraid  of  us  or  suspicious  of  us,  with  the  gratitude, 
the  affection  and  the  confidence  of  all  the  nations 
concentrated  on  this  nation  of  free  and  self- 
governed  people.  That  would  be  a  transcendentally 
glorious  culmination  of  the  fondest  and  highest 
dreams  of  our  great  founders. 

We  have  the  people  with  the  souls  in  them.  We 
have  the  dollars  beyond  our  most  exaggerated 
hopes.  If  we  put  the  soul  of  the  people  in  the  use 
and  application  of  the  dollars,  the  loftiest  and 
noblest  conceptions  of  the  centuries  will  be  fulfilled 
by  us.  And,  gentlemen,  you  govern  the  use  of  the 
dollars. 


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